[Congressional Record Volume 159, Number 28 (Wednesday, February 27, 2013)]
[Senate]
[Pages S889-S892]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             FISCAL POLICY

  Mr. CORNYN. Madam President, I want to start with some numbers that 
help put our spending budget debate in perspective.
  Since President Obama became President of the United States, our 
gross national debt has gone up by 56 percent--56 percent. Over the 
next decade, unless we act responsibly, it is projected to rise by 
another 57 percent and reach a staggering $26.1 trillion. I don't know 
anyone who can actually comprehend numbers that big, but that is what 
it is.
  By comparison, the sequester--the much-dread sequester that is 
supposed to go into effect on Friday--would cut only 2.4 percent out of 
Federal spending for this next year. It would authorize $85 billion in 
cuts for the current fiscal year, which, as I said, is only 2.4 percent 
of the total Federal budget--2.4 percent. Yet the President is now 
traveling around the country on Air Force One, telling us that a 2.4-
percent spending cut will have a catastrophic effect on our economy and 
on jobs. Of course, this part is predictable: The only solution he 
seems to offer is raising taxes once again.
  We saw in December during the debate over the fiscal cliff--and I 
know the American people must be getting nauseated with us lurching 
from one financial crisis to another, with the fiscal cliffs, 
sequestrations, debt ceiling, government shutdown threats. It is no 
wonder the American people look at Washington and wonder: Can't you 
guys get your act together? But the solution is not to keep on keeping 
on and spending money we don't have and racking up more debt and 
deficits, nor is the solution to continue to raise taxes on the very 
people we are depending upon to invest in new jobs and grow their 
current businesses to create jobs and opportunities for middle-class 
families.
  Rather than the nightmare scenario the President likes to talk about, 
Republicans and Democrats would be happy to give the President and the 
administration some flexibility in how it implements these 2.4-percent 
cuts. Unfortunately, that doesn't seem to be what the President is 
looking for. He doesn't seem to want to figure out how to manage these 
cuts as every family and every small business in America who is left 
with less income coming in the front door would have to do. He doesn't 
seem to want to manage it; he seems to want to use this to scare people 
in order to grow the size of government by raising more taxes. He seems 
to believe that only Washington and only the Federal Government can 
revive strong economic growth by steadily raising our levels of 
taxation and spending. That is sheer fantasy. The President either 
doesn't realize or he doesn't care that Federal spending levels are 
already unsustainable. Everybody knows this. This is not a mystery to 
anyone who has been paying attention.
  For example, a single Federal program, Medicare, which our seniors 
rely upon to provide them the health care they need, already has $37 
trillion in unfunded liabilities; again, an astronomical number that I 
doubt any of us can fully comprehend. But $37 trillion in unfunded 
liabilities is big. America's total unfunded liabilities--this is all 
the promises we have made which we have no current ability to pay for--
exceed $100 trillion. Meanwhile, the national debt keeps going up. It 
is now roughly $16.5 trillion.
  We are fortunate enough to now see interest rates that we have to pay 
on that debt at a historically low figure, but each additional 
percentage point of interest we would have to pay--if interest rates 
were simply to go up to their historic norms--would increase the cost 
of our service on that debt by trillions of dollars. Simply put, we 
cannot spend our way back into prosperity.
  There are things the Federal Government can and should do to boost 
economic growth. We all understand this. The fact is the government is 
not what creates jobs. It is the private sector, small businesses in 
America, entrepreneurs, and the people who take a risk to start a new 
restaurant or open a hardware store. Actually, those small businesses 
are the ones that actually create many more jobs on a percentage basis 
than do the large Fortune 500 companies.
  All we have to do is look around the country, and I know the 
Presiding Officer understands what is happening. We see some parts of 
the country that are growing fast and where jobs are plentiful. One of 
those is Texas, another one is North Dakota. There are some common 
elements in our story that I will talk about in a minute, but for the 
past 8 years ``Chief Executive'' magazine has ranked the best States in 
the country to do business. I would not have brought it up if it were 
not true, but the No. 1 State is the State of Texas. This week Forbes 
ranked the 10 best cities for good jobs, and half of those cities were 
in Texas--including Austin, Dallas, Fort Worth, Houston, and San 
Antonio.
  Texas has nearly 32 percent more jobs today than it did in 1995--32 
percent. Over the same period the total number of jobs nationwide 
increased by only 12 percent. I would think curious people would wonder 
why. Our State accounts for 8 percent of the U.S. population, but we 
accounted for almost one-third of all private sector jobs in high-
paying industries between 2002 and 2011. Let me say that again so 
everyone is clear. Our State accounts for 8 percent of the national 
population, but we accounted for almost one-third of all private sector 
job growth in high-paying industries between 2002 and 2011. That is 
remarkable.
  Some might wonder what the secret is, and thank goodness the States 
still are the laboratories of democracy where we can demonstrate the 
policies that actually work rather than trying to mandate a one-size-
fits-all policy from Washington, DC, that doesn't work.
  The secret in my State is that we have, for example, no State income 
taxes. We are a relatively low income tax State, although people still 
pay sales and property taxes. We have minimal and sensible regulations 
because we know that not only do taxes depress economic growth, we know 
government--either State government, local government, or Federal 
Government--that issues punitive regulations can actually dampen 
economic growth and job creation.
  We also have a relatively low level of per capita government 
spending. People don't come to Texas because they want handouts. They 
come to Texas because they want an opportunity to work, to achieve, and 
to live their dreams and in the process creating a lot of jobs and 
opportunity for other people. We are also--and I know this is where the 
Presiding Officer can identify with this statement--unapologetic about 
harvesting our State's abundant oil and gas reserves. Indeed, Texas oil 
production increased by 94 percent between September 2008 and September 
2012. Shale gas is natural gas that is produced by hydraulic fracturing 
and horizontal drilling. It has been around--actually fracking--for 
roughly 60 years now. When done properly, it is safe and does not 
damage the water supply. The shale gas now available due to horizontal 
drilling and hydraulic fracturing has produced a shale gas revolution 
in this country.

  The truth is that if we get out of the way and sensibly regulate this 
industry, open the Keystone XL Pipeline--which the President could do, 
but he has not yet done--it would not only create thousands of new 
jobs, it would create the potential for North American energy 
independence. Imagine how that would change the geopolitics of the 
planet. In instances where the Iranian regime threatens to shut down 
the Strait of Hormuz and block 20 percent of the world's oil supply, it 
would not have nearly the impact because our country would be North 
American energy independent within a decade or so.
  Well, I should also footnote the fact that down in Eagle Ford Shale--
which

[[Page S890]]

is south of San Antonio, and where I am from--they had some of the 
highest unemployment rates in our State. Much like the Bakken Shale, 
anybody who can get a commercial driver's license and pass a drug test 
can earn a lot of money. As a matter of fact, commercial truckdrivers 
in south Texas now can earn over $100,000 a year, and it is hard to 
find workers. They were suffering a shortage of workers because of the 
economic activity caused by natural gas exploration production.
  The President should also reject misguided policies by the Federal 
Government that are killing jobs and threatening to put many oil and 
gas producers and refiners out of business. He should loosen 
restrictions on Federal lands and offshore drilling, and he should 
certainly issue more drilling permits. Expanding domestic energy 
production and eliminating harmful regulations would promote job 
creation and reduce unemployment, just as it has in my State.
  In a larger sense, embracing this model would help the United States 
gain much of its economic competitiveness and fiscal credibility that 
we have recently lost. It would send a clear message that we are 
serious about rejuvenating our economy and reducing our long-term debt 
burden. Above all, embracing this model would show that Washington has 
discovered our founding principles of limited government, individual 
freedom, and personal responsibility.
  I will close on this and say that I have not heard the President talk 
recently about 7.9-percent unemployment in this country, nor have I 
heard the President talk about the reduced number of people who are 
actually still looking for jobs. That number would be much higher 
because there are people who have lost their jobs and are still 
actively seeking jobs. Notwithstanding that, we know from the 
Congressional Budget Office that the unemployment rate will actually 
get worse by the end of the year. This is very urgent. It is not just 
about statistics; it is not just about numbers; it is about people who 
are hurting because they are out of work and unable to provide for 
their families.
  One would think this would be a cause we could all come together on 
and address to the best of our ability using some of the powerful 
examples in States such as North Dakota and Texas.
  I yield the floor, and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. THUNE. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THUNE. Madam President, we are hearing a lot of discussion here 
in Washington and around the country this week about the so-called 
sequester, which I think bears some explanation. Oftentimes we talk in 
terms and in such a way that I think ordinary Americans have a hard 
time understanding the arcane world and arcane lexicon we have here in 
Washington, DC. Basically we are talking about these spending cuts--
across-the-board cuts--that will take effect at the end of this week. 
It was a process that was put in place many months ago. In fact, if we 
go back to the Budget Control Act, which passed in August of 2011, we 
won't find very many people now who will claim paternity of that idea.
  In fact, there is a big debate and a lot of finger pointing about 
whose idea this was and whose fault it was that we are where we are. I 
would simply point out that I think there are a lot of Republicans and 
Democrats who voted for the Budget Control Act, so clearly many of us 
voted in support of that as a last resort. Many of us didn't want that 
to happen. We wanted to see a deal worked out where we would actually 
address the major problems facing this country with regard to our 
spending and debt. But since that couldn't be negotiated between the 
President and the leadership of Congress, we ended up with this process 
where we had some immediate spending cuts taking effect--about $900 
billion, with another $1.2 trillion to follow--hopefully achieved 
through reforms, including tax reform, entitlement reform, by a so-
called supercommittee that met and convened for a while. However, when 
that committee failed to reach a conclusion, it set in process, set in 
motion, what we know today as sequester.

  It was actually built to go until the 1st of January, in which case 
all of these things would take effect if nothing had happened. Clearly, 
nothing had happened. So when January rolled around, we ended up with 
this process we now know as sequester.
  I wish to point out that the President has been running away from 
this; somehow this just imaginarily appeared, this idea of sequester. 
But if we go back and look at the origin of this, we see it was clearly 
something the President and his people put forward. Fine points have 
been laid out by Bob Woodward in his book and subsequent op-ed this 
last weekend in which he stated very clearly this was an idea that 
originated with the White House. In fact, Jack Lew, in his confirmation 
hearing before the Senate Finance Committee, actually mentioned the 
fact that when they were looking at something they could use--a 
trigger, if you will--they drew upon the Gramm-Rudman-Hollings 
agreement that was agreed to back in 1985 by the Congress, and that 
incorporated this idea of a sequester, which included an across-the-
board spending cut. So, basically, it came from the White House. It 
came from the President and his people. That is where the idea of 
sequester originated. So to suggest now that somehow they didn't know 
about this or they didn't have anything to do with it, that it isn't 
their responsibility, is completely contradictory to the facts, as has 
been delineated by Bob Woodward in his book and many others who are 
familiar with those discussions.
  The point, very simply, is we have a process that was put in place a 
long time ago. We can go back to August 2011 when the Budget Control 
Act was passed to find out why we are where we are today.
  The other thing that is interesting to me, which I think has now 
added to the narrative of trying to reconstruct the history of all 
this, is the idea that somehow there should have been taxes 
incorporated in this, that we needed to have a ``balanced approach'' in 
the sequester. That was never contemplated. This was all on the 
spending side. If we look at the history of this and we actually listen 
to, again, the people who are familiar with those discussions--and Bob 
Woodward, this weekend in his op-ed said: The President is moving the 
goalpost. The revenues and taxes were not a part of this. But now, all 
of a sudden, the White House is insisting upon: We want taxes to be a 
part of this.
  What is ironic about that is they got taxes. They got a big fat tax 
increase on January 1 of this year. That wasn't balanced. There were no 
spending cuts. That was all taxes: $620 billion. So from our 
perspective, the tax issue has been dealt with. The President got 
revenues--revenues that weren't contemplated by the sequester in the 
first place. Yet, today, he gets up and argues that this needs to be a 
``balanced'' plan, which is a euphemism around here for: We want more 
of your tax dollars. We want more taxpayers' money to come to 
Washington, DC. We want higher taxes. That is what that message is 
essentially saying.
  When the President and many of his allies on Capitol Hill say: We 
want a balanced plan, that means they want tax increases--on top of the 
$620 billion in new taxes the President got on January 1 of this year.
  Now, what is interesting to me about this whole process is it was 
reported this morning that the President has called a meeting on 
Friday. He now wants to convene a meeting on Friday to talk about these 
Draconian cuts that are going to go into effect, and he has been 
traveling all over the country picking the most high-profile, highly 
visible items he can that would suggest this is going to have this 
profoundly dramatic impact on people around this country. So now he is 
coming back to Washington. When? March 1. When is that? It is the day 
the cuts are designed to go into effect.
  Where has the President been for the last year and a half? Where is 
the leadership in waiting until the very day these cuts are supposed to 
go into effect to say: Oh, let's have a meeting to talk about what we 
might be able to do to avoid the impact of these across-the-board 
spending reductions.

[[Page S891]]

  So March 1. OK, here we are, eleventh hour, once again, at the last 
minute, the President sweeps in and says he wants to do something to 
try to avert this sequester. But, again, remember: We have known about 
this for a year and a half. This is not a new revelation. We have known 
this was coming for a very long time.
  The supercommittee failed to produce a result in November 2011. So it 
is almost a year and a half now we have known the sequester is coming. 
In fact, last summer we passed legislation in Congress that asked the 
administration to give us some detail and some specificity about where 
these cuts were going to take place, and we got some vague outline 
about that. We didn't get any report from the President that enumerated 
these because, frankly, I don't think they had gone through the process 
of trying to figure out what they were going to do with it.
  So here we are now 18 months later, at the eleventh hour, and the 
President all of a sudden says: Let's have a meeting and talk about 
what we might be able to do to avoid the impact of these across-the-
board spending reductions. Where is the leadership in that? Why weren't 
we doing that 12 months ago, 11 months ago, 10 months ago, 1 month ago, 
last week? Why weren't we talking about this earlier? Why do we have to 
wait until the very last day to have a discussion about this?
  Well, evidently, the President is better at campaigning than he is at 
governing because he has been driving all over the country--I shouldn't 
say driving, flying all over the country, over 5,000 miles--over 5,000 
miles--campaigning on this issue to try to scare people into believing 
that an $85 billion across-the-board spending reduction, which 
represents 2.4 percent of Federal spending this next year, is somehow 
going to be disastrous for our economy and for our country.
  Frankly, I am not in any way diminishing the impact of spending 
reductions. Spending reductions will have some impact--there is no 
question about that--for sure. But to go out and say we are going to 
have 90-minute lines at airports, and we are not going to have meat 
inspectors, and all these things they are trying to put out there to 
scare the American people, to dramatize and, frankly, to traumatize the 
American people about a 2.4-percent reduction in overall Federal 
spending?

  Now, if a person is a member of an average American family or an 
American business or anybody in this country, and they know they are 
going to have 2.4 percent less to work with next year, what do they do? 
They sit down around their kitchen table and figure out what those 
things are they spend money on that they can live without. It is a 
fairly simple exercise. In most cases, people are going to pick the 
low-priority items. They are going to pick the things they can probably 
live without. They are not going to pick the things they really need 
and rely upon and depend upon. But I think most Americans would agree 
they could find a 2.4-percent reduction in their annual spending if 
they had to. I think that is something ordinary, average Americans have 
to deal with all the time: Let's just tighten our belts a little bit; 
let's figure out how we can get along with 2.4 percent less spending.
  Well, we are talking about 2.4 percent less spending on a $3.6 
trillion annual Federal budget. What does that represent? So $85 
billion is a lot of money. It is a lot of money anywhere. It is a lot 
of money in my State of South Dakota. In the small town I grew up in, 
those are dimensions we didn't even contemplate in most cases.
  But we think about it this way: $85 billion, the amount of money we 
are asked to reduce in terms of the overall Federal spending this next 
year, is the equivalent of how much our country borrows every single 
month. Every 28 days, we borrow $85 billion. So every single month, we 
borrow--we put on the backs of our children and grandchildren--as much 
money as the Federal Government is being asked to live without for an 
entire year: 2.4 percent of annual Federal spending.
  To be fair, people will say: Wait a minute. It is not 2.4 percent 
because it is just affecting a certain area of the budget, and they are 
right. It will represent a bigger percentage simply because so much of 
the budget has been walled off from this, the area where the real 
Federal spending is; where three-fifths to two-thirds of all Federal 
spending has essentially, for all intents and purposes, been protected 
or insulated from this. There is a small 2-percent cut that would occur 
in some of the mandatory areas of the budget, but for all intents and 
purposes, what really drives Federal spending year in and year out and 
what is going to represent, according to the Congressional Budget 
Office, about 91 percent of all Federal spending 10 years from now--
Social Security, Medicare, Medicaid, food stamps; mandatory Federal 
spending entitlement programs--that is pretty much walled off.
  So we are increasingly shrinking the discretionary part of the budget 
which represents a smaller and smaller portion of Federal spending each 
and every year. But the reality is it still is 2.4 percent out of a 
$3.6 trillion annual budget that we are talking about. So it seems to 
me, at least, that all the hand-wringing that is going on in Washington 
right now and all the drama the President is trying to create by flying 
over 5,000 miles across the country, campaigning about the effects of 
this sequester, really gets lost in what I think every American has to 
deal with every single day and every single week and every single month 
and every single year; that is, sometimes they have to make do with a 
little bit less, and maybe Washington, DC, can figure out how to do 
that.
  But we have to ask the question again: Where is the leadership? The 
President, on Friday, March 1--the day this happens--decides to have a 
meeting when we have known about this for 18 months. The Senate, under 
the leadership of the majority--the Democrats in the Senate--hasn't 
passed a budget now for 1,400 days. We have gone 1,400 days without a 
budget. We are going on 4 years without a budget. We spend $3.5 
trillion, $3.6 trillion of the American taxpayers' money every single 
year, and we haven't had a budget that suggests how we are going to 
spend it now for going on 4 years. Where is the leadership?
  The President of the United States submits a budget--which he will do 
sometime soon. He has missed the deadline already, but we assume it is 
coming in the next few weeks. But over the last couple of years when he 
submitted a budget to Congress, when it was voted on in the House and 
in the Senate, it didn't receive a single vote.
  Now, it perhaps is not surprising it didn't receive a Republican vote 
because it had a lot of tax increases in it, but it didn't get a 
Democrat vote--zero, zilch--in the House or Senate. There wasn't a 
Republican or a Democrat who voted for the President's budget. Why? 
Because it wasn't serious. The President is not doing anything to 
meaningfully address out-of-control spending and out-of-control debt.
  So here we are. The Budget Control Act finally did put in place some 
spending reductions, and now everybody is hyperventilating about what 
we can do to avoid them. How can we turn this off? How can we shut off 
the sequester?
  I, frankly, believe we could do this in a much better way, a more 
responsible way when it comes to the spending reductions. We ought to 
do it in a way that doesn't put a disproportionate burden on the 
defense budget. National security represents 20 percent of total 
Federal spending, but it gets 50 percent of the cuts under the 
sequester. That is not the way it ought to happen. I am all for--and 
plans have been offered and twice passed by the House Republicans--to 
replace this sequester with other--what we believe are more responsible 
spending reductions. But that passed the House of Representatives; it 
can't pass in the Senate.
  The President has had no interest in looking at some alternative. The 
only alternative he is interested in is the one that would do the most 
harm and the most damage to the American economy; that is, more taxes. 
If he gets taxes on this, if he gets taxes to turn off the sequester 
like the taxes he got on January 1, it will not be enough because it is 
never enough.
  People who believe in big government and believe the way to solve 
deficits is to raise taxes are never going to raise enough revenue. If 
you do not address what is really afflicting our country--and that is 
out-of-control spending--you have not done anything to solve the 
problem, which the $620 billion tax increase on January 1 demonstrated. 
The amount of money, the

[[Page S892]]

amount of revenue generated from that tax increase January 1 will fund 
the government this year for less than a week--less than a single week.
  This is not a revenue problem. This is not a tax problem. This is a 
spending problem. It is time for some leadership. It is time for the 
President to quit campaigning, to come back here, and to start 
governing. But here we are--Friday, the day it is all set to take 
effect--we have a $16 trillion debt. The Congressional Budget Office 
says at the end of the next 10 years it is going to be $26 trillion. We 
are adding $1 trillion a year. We are borrowing 40 cents out of every 
$1 we spend. Revenues coming into the Treasury, according to the 
Congressional Budget Office, are going up, actually; and by 2015 they 
are going to be 19.1 percent of our entire economy, which is more than 
a percentage point higher than the 40-year historical average.
  Revenues are going up, and for the next decade, according to the 
Congressional Budget Office, revenues will exceed, by about a 
percentage point, the 40-year historical average. So revenues are 
coming up to above historical averages, and yet we continue to run 
trillion-dollar deficits as far as the eye can see.
  Well, we have to get our spending under control. We have to get the 
economy going again. The Republican staff on the Joint Economic 
Committee put out a study that suggested if we had revenue growth like 
we have had--average revenue growth--for the past 60 years, if we had 
that in the past 4 years, the deficits today would be half of what they 
are. That is the impact of economic growth. That is why growing at 1\1/
2\ to 2 percent is not enough. We have to grow at 3 to 4 percent. But 
to grow at 3 to 4 percent, we have to have policies that promote 
growth, that allow the economy to expand. We cannot keep piling on new 
taxes and new regulations and making it more difficult and more 
expensive for people who create jobs in this country to create those 
jobs.
  So the economy will continue to grow at a sluggish, anemic rate. We 
will continue to have these high deficits, particularly if we do not 
get our spending under control. It is about exercising fiscal 
discipline and responsibility when it comes to our spending. It is 
about putting policies in place that promote job creation and growth in 
this country. That is what it is going to take to get this country back 
on track. Yet the President is out campaigning around the country. He 
comes back now at the eleventh hour, and on March 1 he decides to have 
a meeting at the White House to talk about something we have known was 
going to happen now for 18 months--18 months.
  We have the most predictable crisis, according to the Simpson-Bowles 
Commission, we have ever seen--the spending and debt crisis that is in 
front of us. We have known about it for a long time. You can see it. It 
is like a slow-moving train wreck out there. You are just watching it. 
You just know it is going to happen, and yet nobody is doing anything 
to turn off the engines.
  It is high time we did that. I hope the President will engage. I hope 
we will get for the first time now in almost 4 years, 1,400 days, a 
budget in the Senate that puts a plan in place--a real plan, not a fake 
plan, not a phony plan, not a plan that has a bunch of tax increases, 
but a plan that actually addresses what drives Federal spending and 
debt in a way that will put us on a more sustainable fiscal path and 
ensure that future generations of Americans have a higher standard of 
living, a higher quality of life than what previous generations have 
had, not a lower and a less one. That is the path we are headed on 
today if we do not change course.
  Madam President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BAUCUS. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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